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Provide a Real Option Model for Managing Airlines' Revenue Management

Esmaielzade Pakdaman, Hamid Reza | 2018

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  1. Type of Document: M.Sc. Thesis
  2. Language: Farsi
  3. Document No: 51904 (01)
  4. University: Sharif University of Technology
  5. Department: Industrial Engineering
  6. Advisor(s): Modarres, Mohammad
  7. Abstract:
  8. In this thesis, we will examine the issue of managing airlines' income and determining the appropriate policies for storing accommodation for different classes in the seats of a flight. Most airlines use a nesting structure to allocate seats, in which access between classes is possible, but only the higher class can access all the seats in the subclass. It is assumed that this structure and allocation process increase company revenue, but the problem is that the chances of staying in the seat will increase in the hope of higher demand and higher risk of corporate income reduction.With the goal of providing a way to determine the optimal classroom dynamically, this study, for the first time, with the help of real option to complete modeling of the allocation problem. Given that all capacity allocation systems use the nest method to control class capacity, using the three option to expand, option to abandon and option of choose, while modeling the nesting approach, the problem is to help It eliminates the real option and thus obtains a dynamic method of determining the capacity that complements the static methods. In this way, while increasing the airline's revenue, the chances of staying in the seat are diminished during flight time
  9. Keywords:
  10. Revenue Management ; Airline Management ; Real Option Method ; Capacity Allocation ; Dynamical Systems

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